Panning for gold makes a comeback in bad economy

Ashley Michalak and Nate Neitz are dipping pans of dirt into a long wooden trough on a hot summer day. But these aren't ordinary pans, and it's not ordinary dirt. They're gold pans, and the dirt — they hope — is pay dirt. The two cousins are panning for gold at the Cotton Patch Gold Mine in the heart of the nation's oldest gold-mining country. "It's cool. You never know what you're going to find," says Nate, 12.

Ashley, 11, has found two small pieces of gold, about the size of a pencil tip. By the end of the day, the two will bring home 10 small flakes of gold in tiny plastic bottles.

Bob Michalak, their grandfather, brought them to the gold fields just to have fun hunting treasure on a hot summer day. But the nation's shaky economy has sent gold rocketing to $950 an ounce, as investors spurn greenbacks for the yellow metal — which, they figure, will always be worth something. High gold prices, combined with increasing economic uncertainty, means that more families are including gold panning in their vacation plans. And, because a little bit of gold can become a lot of money, gold panning for some people is more than a hobby: It's a source of much-needed income.

Down the road from the Cotton Patch Gold Mine, in Midland, N.C., is the Reed Gold Mine, site of the nation's first fit of gold fever. In 1799, Conrad Reed, 12-year-old son of farmer John Reed, discovered an unusually heavy 17-pound rock, which his father used as a doorstop until selling it for the rock-bottom price of $3.50 a few years later. (It was worth $3,600 then, or about $193,000 at today's gold prices.)

Today, John Reed's gold mine is a state park and, after more than 200 years of mining, it still yields some gold. That brings 300 to 500 people a day to look at the underground galleries and pan for gold. Workers bring the gold-bearing dirt from the nearby creek, and the park charges $2 a pan.

"You get a piece of gold in every six or seven pans," says park interpreter Michael Scott. "Nobody's getting rich."

It's not just kids panning for gold in North Carolina gold country. John Burns, 64, comes to the Cotton Patch mine nearly every weekend, when he's not searching for gold elsewhere. A Vietnam veteran and retired plumber, Burns wanted something to do — and the money wasn't such a bad thing, either. "There aren't many hobbies that pay you back," Burns says.

$12 for a chance at minor riches

North Carolina gold tends to be small flakes. The largest found at the Cotton Patch since owner Jeff Pickett took over two years ago was 8 grams — about the size of your pinky nail. At current prices, that would be worth about $240. "Anything larger than that is a heart attack," Burns says.

Pickett charges prospectors by the amount of dirt they sift. The dirt is partly crushed rock — gold is often found in the presence of quartz, which has to be pulverized to extract the gold. The rest is dirt from the lode on Pickett's property.

For $12, you get five 2-gallon buckets of dirt, a pan and a small bottle for keeping your gold. Panning takes patience, dipping the pan into the water to wash away the lighter dirt, tossing aside the bigger stones, and watching for tiny flecks of gold in the fine black sand that's left. It's not easy. "I'm getting a strong right arm," Burns says.

Some prospectors use a Gold Magic wheel, a kind of motorized pan that can process dirt about five times faster than panning. More-eager gold-diggers use a sluice, a long, metal tray with riffles on the bottom to catch the gold. You put it in a creek bed and sift the pay dirt into it, letting the stream wash away the dirt.

The truly ambitious miners prefer a highbanker, a sort of motorized sluice. A highbanker can go through a front-end loader of dirt — $140 at the Cotton Patch — in a day. Prospectors can sell their gold at the camp's general store.

Pickett has far more serious mining equipment, complete with rock-crushing machinery and an industrial-sized sluice that can pull out gold pieces down to tiny dust particles mixed with sand, which he sends to New England to get processed into ingots. Last year, he says, high gas prices kept campers and panners away, and the economy this year hasn't helped, either: He's open for gold panners just on weekends now.

On the other side of the country, in Jamestown, Calif., business is booming. People are coming to Gold Prospecting Adventures to learn how to supplement their income with a bit of gold.

Jamestown, in Tuolumne County, is near the heart of the California mother lode that stretches from El Dorado County down to Mariposa County. (You can still pan for gold at Sutter's Mill, in nearby El Dorado County, where gold was discovered in 1848, sparking the Gold Rush of 1849.)

The Forty-Niners are long gone, but there's plenty of gold left. Old mining techniques were crude, and lots of gold fell into the creeks or simply got overlooked. People come to Gold Prospecting Adventures for day trips and for serious gold-mining advice and equipment. "The type of people coming now are those wanting to get into it; they want to learn how to stake claims," says Bryant Shock, part owner of the company.

Because times are tough and gold prices are high, Bryant is seeing a lot of people in their 20s start prospecting — as well as a lot of people in their 50s. "People can make more money in a few days prospecting than they can working five days a week at McDonald's or Wendy's."

Prospecting equipment sales have tripled since last year, Shock says. "That tells me right there that there are a lot of people looking for gold, and not just here." Indeed, prospectors have staked 54 gold mining claims in Tuolumne County this year, vs. 47 all last year and 32 in '07. A claim lasts one year.

Amateur gold mining isn't without its problems. Sluices have been banned in California because of the amount of debris they can put into local creeks, fouling the streams and killing fish.

And, because mercury and cyanide are useful in removing gold dust from sand, amateurs run the risk of poisoning themselves. Several Internet sites give instructions on using a potato to remove mercury from a gold/mercury amalgam. Others recommend heating the mercury, which can release dangerous fumes. During the California gold rush, some 26 million pounds of mercury were used to extract gold from the ore, and much of it remains in the Sacramento River bed today.

Getting gold ore from the ground remains backbreaking work — perhaps even more so now. "When I first started, in 1980, you could go down to the hardware store and order a case of dynamite," Shock says. No longer. "Since 9/11, everything has changed."

Growing more popular all the time

Yet the difficulties in getting gold haven't stopped the soaring popularity of prospecting. The Gold Prospectors Association of America reports a 20% increase in membership from last year, to about 50,000. "I was in Nome, Alaska, where you used to see five or six people using dredges on the beach," says Brandon Johnson, director of operations for the GPAA. "Now you're seeing 18, 19 of them — people are selling the gold they find and using it to pay the bills."

Back at the Cotton Patch, however, John Burns talks about what interests him in prospecting. "My primary interest was getting outside, and getting away from crowds," he says. "But finding the gold is the real excitement."